General Communiqués Published For Implementation of Lists (III) and (IV) of Special Consumption Tax Law

The Ministry of Finance has published two General Communiqués for Implementation of Lists (III) and (IV) of the Special Consumption Tax Law number 4760 (the “Law”). The communiqués were published in the Official Gazette on 8 August 2015 and 20 August 2015, respectively. They outline provisions applying to the listed goods, as well as the procedures and principles which must be applied during implementation of the Law.

List (III) of the Law includes:

– Carbonated drinks with kola.

– Alcoholic beverages.

– Cigars and tobacco products.

Carbonated drinks without kola or ethyl alcohol are not included in List (III).

List (IV) of the Law includes a range of goods, such as: cosmetic products, furs, certain glassware, manicure and pedicure tools, gold or silver plated cutlery, air conditioners, heaters, major and small house appliances, electronic items such as mobile phones, speakers, headsets, televisions, cameras, pistols and other incendiary weapons, as well as crystal chandeliers, certain gaming items, caviar and ornaments made of animal materials.

The communiqués specifically address the tax obligation applied to the listed goods, as well as tax exceptions and deductions. They also discuss tax assessment, ratio, amount, authorization and joint liability, as well as the Special Consumption Tax which is collected by Customs Administrations.

The communiqués both come into effect on 1 July 2015. Please refer to the following links for the full text of the communiqués regarding List (III) and List (IV) (only available in Turkish).

The full text of a Constitutional Court decision was published in Official Gazette number 29442 on 11 August 2015. The decision holds that during a land expropriation, if a delay occurs between determining the compensation amount and payment to the landowner, interest and inflation should be taken into account and added accordingly to ensure property rights are not violated.

In these circumstances, the applicants claimed their right to a fair hearing and property rights had been violated on the basis that:

– A different method had been applied to calculate the expropriation amount compared to other law suits.

– A judgment on the dispute had not been made within a reasonable period of time.

– A loss of value had occurred due to the length of time which elapsed between the determination and payment.

The Constitutional Court rejected the applicant’s first and second claims. However, the Constitutional Court upheld the third claim, determining that the applicant’s property rights had been violated by the loss of value.

The court noted that due to the public interests involved, legislative principles must be applied and consideration paid when expropriating properties from landlords. Accordingly, a property’s real value must be paid in cash and in advance. The Constitutional Court went on to state that if payment is delayed, the previously determined amount cannot be taken as the property’s real value. Rather, the administration must consider interest and inflation, then compensate the difference to ensure property owners do not receive unjust treatment.

The full text of the Constitutional Court’s reasoned decision can be found at this link (only available in Turkish).

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Constitutional Court Rejects Applicant and Issues Fine for Falsely Alleging Breach of Right to Fair Trial

In a recently published decision, an applicant to the Constitutional Court claimed the Supreme Court had breached their right to a fair trial. The Constitutional Court held that the applicant had falsely alleged the breach of its right to a fair trial. The Constitutional Court rejected the claim and fined the applicant TL 500 on the basis that it had abused its right of petition.

The applicant alleged to the Constitutional Court that the Supreme Court had breached his right to a fair trial by:

– Holding a revision of decision examination without the parties requesting this.

– Misinterpreting waiver provisions.

– Not concluding the proceedings within a reasonable time period.

The Constitutional Court noted that the Ministry of Justice had stated that a decision cannot be revised without one of the parties requesting this action. However, the Constitutional Court held that contrary to the applicant’s claims, the defendant in the Supreme Court proceeding had actually requested such a revision. The Constitutional Court held that the applicant had used his right to reply against the counterparty’s request, and therefore was aware of the defendant’s revision request.

The Constitutional Court rejected the applicant’s claims on the basis that:

– The applicant’s claim involves a misleading statement.

– On examining the relevant file, it is clear that a decision revision request has been made.

The Constitutional Court emphasized that using false material facts or submitting false information and documents with the intent of perverting the court is an abuse of the right to appeal.

The Constitutional Court imposed a TL 500 disciplinary fine on the applicant under Article 51 of Law number 6216 and Article 83 of the Constitutional Bylaws.

The Constitutional Court’s decision was published in Official Gazette number 29442 on 11 August 2015. The full text of the reasoned decision can be found at this link (only available in Turkish).

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Constitutional Court Rules on The Right to Receive a Trial Within a Reasonable Time Period

The Constitutional Court recently considered an action where a proceeding was not held for four years and three months (2013/3689). In the circumstances, the court held that the applicant’s constitutional right to receive a trial within a reasonable time had been violated. The Constitutional Court held the case’s facts to not be complicated. Rather, the Constitutional Court held the trial was delayed due to the court’s attitude.

The Constitutional Court considered the following factors:

– Difficulty of settlement.

– Qualification for trial.

– Complexity of material facts.

– Obstacles to evidence collection.

– Number of parties.

– The applicant’s use of procedural rights.

– The applicant’s attitude and behavior.

The Constitutional Court unanimously held that the factors noted above had not caused the trial’s delay, but rather the court’s attitude had. Accordingly, the Constitutional Court held that the applicant’s rights were violated and awarded the applicant’s legal and attorney’s fee be paid, as well as intangible compensation.

The Constitutional Court referred to principles and rights contained in the European Convention on Human Rights (“Convention”), as well as judgments by the European Court of Human Rights (“ECHR”) as supporting the right to a fair trial. The right is outlined in Turkish legislation by Article 36 of the Constitution.

The Constitutional Court held that the overall right to a fair trial includes the right to receive a trial within a reasonable time. The court also noted that Article 141 of the Constitution specifically states an objective for courts is completion of trials with the least expense and in the fastest manner.

Overall, the Constitutional Court held that disputes regarding civil rights and obligations must be settled within a reasonable time period. The court based the decision on ECHR jurisprudence, Article 6 of the Convention and Article 36 of the Constitution.

In particular, the Constitutional Court held that factors which must be considered when determining whether reasonable time has passed include the:

– Case’s complexity.

– Number of parties.

– Attitude of parties and authorities.

– Interest of the applicant in relation to fast settlement of dispute.

When determining whether a reasonable time has elapsed, the Constitutional Court explained that the relevant period extends from the lawsuit’s filing date through to the final date of the trial.

Please see this link for the full text of the Constitutional Court’s decision (only available in Turkish).

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Court of Appeals Rules Employees Not Entitled to Severance Pay at Expiry of Definite Term Employment

In a recent decision, the Court of Appeals Assembly of Civil Chambers (“Court of Appeals”) held that employees in definite duration agreements are not entitled to claim severance pay if the agreement expires based on the agreed termination criteria (decision dated 30 May 2015, 2014/22-391 E., 2014/710 K.). The Court of Appeals reasoned that an agreement expiring after a definite term is not a termination reason which can be attributed to the employer. It also noted that these circumstances are not included in the legislative qualifying criteria for severance payments.

In the case at hand, the employee was dismissed from employment without receiving notice. The employee filed a re-employment lawsuit, claiming the agreement is not automatically terminated because he had been undertaking other additional work besides the specified contractual tasks and this other work had continued after termination of his employment agreement. The employee argued that it was not possible for him to be aware of the termination without receiving notice. He further claimed that the employer’s failure to renew the agreement should be deemed to be termination of the contract by the employer.

The court of first instance held in favor of the employee. The lower court held that whether an agreement is concluded for a definite or indefinite term has no impact on entitlement to severance pay.

The Court of Appeal ultimately overturned the lower court and held that the case hinged on whether an employee is entitled to severance pay when a definite term employment agreement expires. The Court of Appeals based its reasoning on Article 14 of Labor Law number 1475, which remains in force despite the rest of the law being abrogated. According to Article 14, severance pay is only available where the employment agreement is:

– At least one year old, measured from the date the employee started working.

– Terminated in a manner stipulated under Article 14, or by the employee’s death.

The Court of Appeal noted that in the case at hand the agreement expired due to the conclusion of the specified work. Therefore, the Court of Appeals held that the employer had not terminated the employment agreement. Rather, the agreement had terminated automatically, in line with the parties’ initial intentions.

Article 14 clearly states when severance pay can be claimed. The Court of Appeal held that severance pay cannot be claimed in the case at hand because automatic expiry of the agreement is not a termination method mentioned in Article 14.

The Court of Appeals’ recent decision is in line previous decisions on expiry of definite term decisions from 1993 and 1996.

The Turkish Union of Notaries announced on its website that a seller’s guarantee declaration is sufficient for preliminary pre-paid sale contracts which are executed before notaries. The Turkish Union of Notaries sought the opinion of the Ministry of Customs and Commerce on the topic, before making its website announcement on 5 August 2015 (numbered 67).

Certain content must be included in preliminary pre-paid sales contracts for houses, executed with consumers before notaries. However, in practice some notaries also request demonstrative guarantee documents. Therefore, the Turkish Union of Notaries sought information from the Ministry of Customs and Commerce.

For projects with 30 or more houses, pre-paid contracts for sale of the houses must include information about the seller’s guarantees (Article 7 of the Regulation regarding Pre-paid Contracts for Sale of Houses, published in Official Gazette number 29188 on 27 November 2014; “Regulation”).

Within this context, the Turkish Union of Notaries sought to clarify whether for preliminary pre-paid contracts regarding sale of houses, notaries must either:

– Issue the contract’s guarantee terms in line with the parties’ declaration, or

– Request demonstrative guarantee documents from the parties.

The Ministry of Customs and Commerce advised that for projects of 30 or more houses, the seller must provide:

– The mandatory content (stipulated under the Regulation) to the consumer at least one day before execution of the contract, and

– At least one of the guarantee types outlined in Article 12 and subsequent articles of the Regulation.

The Ministry of Customs and Commerce advised that notaries do not need to seek demonstrative documents for such guarantees. However, it noted that notaries should complete the contract’s mandatory content, as outlined by Article 7 of the Regulation, including the guarantee information.

The Turkish Union of Notaries’ announcement is in line with the opinion given by the Ministry of Customs and Commerce. Accordingly, it announced that notaries do not need to request substitutive guarantee documents in such transactions. Rather, notaries should simply complete the preliminary pre-paid contract by filling in the necessary information, including the guarantee information.

Please see this link to see the full text of the ruling (only available in Turkish).